Marketing and Innovation
Case Study Chapter 8: “It is brand new, but make it sound familiar” (NY Times, 4 Oct 2009) * When companies develop innovative products and service that don’t obviously fit into established categories, manage need to help people understand what comparison to make Without this step, potential customers might just walk away wondering “What is it?” * Normally, people instinctively sort and classify things this is how me make sense of a complex world * Basic traits of behavior : When people encounter something they don’t recognize, they make sense of it by associating it with something familiar * Example: “Horseless carriage” use the word “horse” to make people understand the function of the “car” (like a carriage but don’t have horse) giving a clear point of comparison * What category you place something in has a huge influence on how you view its basic properties features to expect & when and how you should use that item * People will place the same item in different categories, depending on what cues they are given * Companies can benefit by using comparisons to create expectations that best match an innovation’s strengths * Example: Tap ‘n Tap company * develop a touchscreen device that combines multiple household applications including communications (e-mail, chat), web-based information access (weather, news), household management (family calendars) and entertainment (videos, e-books) * The company’s founder want people to view the products as more convenient, intuitive, and fun (don’t want people to think that it’s similar to laptop) * The closest analogy he could come up with was a mobile internet device like a smartphone, but use at home so he called it a “home internet device” * Problem can occur when consumers can’t place innovation into familiar categories * Example: Segway * At first, it was called “i167” * People don’t know what it is * No clear analogy people had no idea how to use it * Company has to help people figure out how this thing fit into their lives * So they create models with labels, such as, i2 Commuter, i2 Cargo, X2 golf help consumers understand what applications suit them * The importance of linking innovation to something familiar also applies with service * Example: Linear Air, based at regional airport near Boston * Offer custom-scheduled flights that let people avoid the hassles of commercial travel with lower cost than a larger business jet or charter * The company called it “Boston Coach with Wings” links with Boston coach (which caters to business travelers and creates expectation of efficient, consistent, and convenient travel) * Finding the right label is only one of the many ways organizations can influence the way consumers categorize product. They can also experiment with the products’ shape, packaging, and retail store placement * Lexar media create memory card * At that time, people didn’t know what is memory card and didn’t know how digital camera works * Lexar media’s product was put in gold packaging similar to the color of Kodak’s file cartridges, given a speed rating to create an analogy to ISO ratings, and labeled as “digital film” and placed in camera section of retail stores * Sony, by contrast, promoted a competing categorization by labeling its cards as “memory stick” and advocating their use for many of the company’s consumer electronic devices, including digital music players, handhelds, and digital camcorders. * Other companies also adopted this broader memory classification, so Lexar media’s success in establishing memory card as analogous to film was short-lived, and Lexar stopped promoting the cards as digital film * As innovative products are introduced, category boundaries are continually shifting and new categories emerging * Now consumers are confronted with many new electric cars with designs that just don’t look like what we expect a car to look like * Will electric vehicles be broadly accepted? And which models will be most popular? the answer depends on the associations that automakers try to imprint on consumers